How Has COVID-19 Affected Service Businesses, What’s Causing Shipping Delays, and Why Are Shortages Affecting Everything?

Daniel Edgerton-Dickey, Staff Reporter

The COVID-19 pandemic was recognized as a serious threat in the US circa January 20, 2020. Since then, businesses on both a local and global level as well as regular people have had challenges maintaining their normal day-to-day routine. To better understand this, interviews and research were conducted to explore the difference between how businesses that provide services and businesses that provide products were affected.


For local service businesses, the problems were more immediate, dealing with how to restructure themselves to accommodate health and safety guidelines and manage with the reduced income. For large global service businesses, the problems are more-large scale and not as easily fixed. The biggest problem that these types of businesses face are worker shortages.


Let us first focus on the challenges faced by a business here in Putney, VT. According to Keith Marks, Executive Director of Next Stage Arts Project, “It has been extremely challenging. We have to cancel shows sometimes.” Fortunately for Next Stage, the pandemic has offered them some opportunities to change and grow, including adding a new outdoor summer series and allowing people to watch the performances from home. Marks goes into detail about these changes, explaining, “We need to limit the capacity in our theater. We need to put in COVID protocols. We’ve invested a large sum of money in livestreaming equipment so people can view from home. … Our summer series was very successful, and we’ll wind up keeping that as a somewhat permanent future of our programming. … We installed UV lights into our air handler system, so those are permanent.”

Kevin Marks, Executive Director of Next Stage Arts Project, during our interview


For larger service businesses, e.g. chain restaurants, big box retailers, and the like, the problems are more-large scale and not as easily fixed. The biggest problem is worker shortages. Before we continue, we should define what exactly a worker shortage is. According to USA Today, a worker shortage does not mean that there aren’t enough workers, it means that there aren’t enough people who are willing to work for what’s being offered. Some speculate that one cause of the worker shortage is the number of deaths from COVID-19. While the loss of life from COVID-19 is unquestionably tragic, deaths due to COVID-19 have not made much of an impact on the number of workers in the workforce, only contributing between 4.3-7.3% of the estimated 3.5 million people who have left the workforce, reports USA Today. This is different than people being unemployed, since many are retirees, as one only counts as unemployed without a job, has actively looked for a job or contacted someone about a job in the last four weeks, and is currently available for work.


As the Washington Post reports, many workers have decided to retire early because of increased retirement benefits and the lowered costs of a simplified work-at-home job. This has led to 1.5 million more people retiring than expected before the pandemic. During the pandemic, workers in professions such as the restaurant, service, caretaker, or hospitality industries have realized how much power they have, and are choosing to either quit grueling low-paying jobs with long hours in favor of better higher-paying ones, or demand more incentives, such as higher pay or better conditions, to work in these jobs. This is especially relevant, as since the pandemic started their jobs have become both harder and more dangerous.


OSHA has released a breakdown of which workers are at the most risk of contracting COVID-19 from their workplaces. As detailed in the breakdown, the occupations with the highest risk of infection are those who work closely with people who have been infected by COVID-19, such as healthcare workers and personnel, followed by people who “have frequent indoor or poorly ventilated contact with the general public, including workers in retail stores, grocery stores or supermarkets, pharmacies, transit and transportation operations, law enforcement and emergency response operations, restaurants, and bars.” It makes sense that if a worker is potentially putting their life on the line to work somewhere, they would want greater compensation for their efforts, and would want to know that their safety is being prioritized. The lack of workers can also have an effect on manufacturing-focused industries.


While production-based global companies are being affected by worker shortages, one example being dock workers unloading goods shipped from overseas–they are facing a unique situation with their supply shortage. The New York Times reports that some of the main reasons for the supply shortages are the fact that many manufacturers were running lean and leaving little margin for error, and the the sudden influx of purchases in the developed world caused great demand for what there was little surplus of. Additionally, the demand for shipping containers increased as protective gear produced in China was distributed around the globe. These containers stay loaded at their destinations longer because workers were being cautious due to the danger of infection. This caused problems as the containers were needed back in China so that manufacturers could ship out their manufactured goods. Shortages of workers to drive the trucks that transport the products from the ports to their destinations also increased the difficulty to meet the requirements for those products.


In addition to having less people than necessary, many businesses are running low on the parts they need to complete their orders. One major shortage is computer chips, also known as semiconductors, which are found in almost everything in our modern life from phones to cars to doorbells. This is not solely due to the pandemic, however, and has been building for many years. A BBC article reports that for some time manufacturers have been barely able to keep up with the increasing demand, and the sudden spike in orders was the final straw. Some effects can be seen immediately. It is almost impossible to find and PS5s because they do not have the resources to make them. Multiple car companies have decreased global production due to a lack of semiconductors for the car’s electronics. Many medical technology companies are facing a similar crisis and can’t fabricate much-needed healthcare products. Manufacturers are attempting to mitigate the semiconductor shortage by building new factories, but construction takes time, and the shortage will not come to an end anytime soon, with chief executives of both Intel and IBM predicting that the shortage will last two years.


This supply shortage has trickle-down effects on smaller service-based industries, though they may not be as immediate as the COVID-19 restrictions and labor shortages. Say your work relies on a set of tools, such as a carpenter, video editor, musician, or truck driver, and one of the tools that you use breaks down. Depending on whether or not it has any type of electronics you may have trouble finding a replacement for it, hindering or even completely removing your ability to work. These are the effects that this shortage can have on service-oriented businesses. These shortages are cause for concern and must be dealt with soon if we want to keep the economy afloat. However, at the end of it all there’s one thing that everyone must remember: people’s lives are, and will always be, more important than a nation’s industry. While money or objects can be replaced, rebuilt, or be created anew, people’s lives, health, and safety can’t.

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